| Country Information Hungary - News
Summer 2004:
In May 2004, the Hungarian Energy Office (HEO) became member of the Council of European Energy Regulators (CEER) and the European Regulators Group for Electricity and Gas. In July, the HEO evaluated the quality of distribution activities of electricity supply companies in 2003. The Office came to the conclusion that indices assessing operational safety of the grid were improving during 2003 both considering annual and three yearly averages. The evaluation of 2003 stated that electricity suppliers fulfilled the indices indicated for economic incentives, therefore no sanction (nor penalty neither tariff reduction) is justified for the year under review.
The continuity of supply to customers also improved in 2003, and the indices are better than the expected level of supply prescribed by the Office. According to HEO’s records, 31 eligible customers entered the gas market up to June 2004 due to the market opening provided by the new Gas Act, which entered into force on 1 January 2004. In the interest of harmonization of the current legislation with EU Directives, preparation of the modification of effective acts is in process.
The Hungarian Energy Office celebrates the 10th anniversary of its establishment in September 2004, for which it invited also the Chairman of ERRA and the regulators of its neighboring countries.
Spring 2004: Political, Regulatory Issues
In November 2003 the Prime Minister appointed Mr Ferenc J. Horváth as the President of the Hungarian Energy Office for six years. Mr. Horvath has been working for the office as a senior officer since its establishment. For the last few years, he was the Vice-President of the office.
The new Vice-President of the Office is Mr. István Pataki, also appointed for a six-year term.
The new Act on Natural Gas and the associating secondary legislation came into force on 1 January 2004, which launched the process of the gas market liberalization. The new gas model is a hybrid model similar to the Hungarian electricity market, establishing a competitive market, while preserving a captive segment. Customers consuming more than 500 mcm/h became eligible by 1 January 2004, which represents 43% of the market.
According to the new model the new market players are the following: Wholesaler, Transmission Licensee, System Operator, Storage Operator, Distribution Licensees, Public Utility Suppliers, Traders and Cross-border Traders. To date, HEO has issued 8 trading licenses and cross-border licenses for the 8 traders and 2 of the eligible consumers among other licenses.
According to HEO’s records, 3 eligible customers entered the market up to 1 March 2004. Due to the impact of the option of a conditional entering the market provided by a governmental decree, which allows for a temporary, test period, an additional 83 customers indicated their will to enter the competitive market up to the end of March. The temporary period will last until 15 April 2004, when customers have to confirm their choice whether they choose the captive or the competitive segment.
New gas price regulation came in force on 1 January 2004. This price regulatory period will take for 2 years. More detailed information can be found on the homepage of HEO.
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